Northern Gritstone, the £382m spinout investor founded by the universities of Manchester, Leeds and Sheffield, is opening a Bay Area office to bring American money onto the cap tables of its roughly 50 portfolio companies. Only five of them currently have a US investor on the register.
Northern Gritstone was established in July 2021 as a vehicle to commercialise research from three of the largest universities in the North of England. It reached a final close of £312m in November 2023, drawing more than £150m from regional pension schemes in Greater Manchester, South Yorkshire, West Yorkshire, East Riding and Merseyside, alongside M&G, Columbia Threadneedle, British Patient Capital, Lansdowne Partners and Bruntwood.
Two further top-ups have followed. A £50m raise in April 2025 brought in Aviva, Fulcrum and a group of northern local government pension partnerships. A further £20m arrived in April 2026 from the British Business Bank and Andrew Law, taking total committed capital to roughly £382m.
The firm has made about 50 investments since writing its first cheque in May 2022. Its most recent was a £3m contribution to the £5m Series A raised by Manchester-based Cytix earlier this month.
The San Francisco move is a distribution play rather than a fundraising one. Chief executive Duncan Johnson said the first step is to recruit a venture partner on the ground in the Bay Area, tasked with giving portfolio companies a network, capital introductions and business development support from the point of arrival.
The gap Northern Gritstone is addressing is a familiar one on UK cap tables. Of its portfolio, only Pragmatic Semiconductor, Iceotope and Phagenesis are among the five companies that have secured American backers to date. Johnson argued that UK companies trade at a discount to US comparables, that American buyers procure faster and carry a higher risk appetite for unproven technology, and that capital will find those opportunities if the introduction is made easy.
The universities behind the vehicle — with Liverpool, part of the wider Northern Arc grouping — command roughly £800m of research funding a year between them, the raw material Northern Gritstone is attempting to convert into venture-scale businesses.
For founders in the portfolio, the practical consequence is a shift in who sits on later rounds. Bringing US growth funds into Series B and C rounds typically means larger cheques, faster deployment and a different set of governance expectations than a domestic syndicate of pension-backed regional capital. Whether that improves exit outcomes for the North's spinout base is the question the next few years of the portfolio will answer.
Original source: BusinessCloud
